iiNet: Looking to buy east coast ISPs

Perth-based ISP has been in talks with competitors for nearly a decade, its chief reveals

iiNet has flagged efforts to buy up ISPs on the east coast to expand its business.

The ISP has been involved in a spate of acquisitions for the past decade, the most recent additions being Perth carriers, Up’n’away and Westnet.

Chief financial officer, David Buckingham, said there was a lot of headroom on the balance sheet for further acquisitions. iiNet’s financial results for the six months ending December 31 indicated revenue and profits were up significantly.

“It all comes down to finding [company] with the right attractiveness in terms of quality of customer base, profitability, synergy potential and price,” he said.

iiNet CEO, Michael Malone, favours ISPs operating within its own geographic footprint that have customers operating off-net (other networks), which it can migrate to its own DSLAMs.

“For now, at least, our primary targets are more likely to be east coast-based and more likely to have a DSL not on that one ... i broadband customer base,” he said. “So that is retail, which is where our core is – we want to keep going with that.”

According to Malone, iiNet has been in discussions with all its competitors for almost a decade and cementing an agreement can be a lengthy process.

“In many cases, it is just about when the time is right for them to exit the market and a price point can be reached where we both feel comfortable,” he said. “Westnet is a good example – we were in talks for eight years. That is just part of the game.

“We’ve been in the industry since the early 1990s, so we know everyone out there and it’s just about finding the right time for both parties.”

While some agreements were close to being finalised, Malone could not disclose the names of organisations involved.

The ISP is also ramping up for its impending IPTV launch in March. The product delivers digital television through the Internet. iiNet has been working with an undisclosed distributor to refine the technology.

“We’ve got a distributor and we want to work on getting a bureau model happening so the product will be available to other ISPs as well,” Malone said.

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